UKX FTSE 100 Index

MARKET WRAPS

Watch For:

Retail Sales for December; Import Prices for December; Industrial Production & Capacity Utilization for December; Business Inventories for November; Fed's Beige Book; Canada Industrial Product and Raw Materials Price Indexes for December

Today's Top Headlines/Must Reads:

- Markets Expect Rate Cuts Soon. Central Banks Say Not So Fast.

- What to Watch in Retail Report: Strength of Consumers Heading Into 2024

- A Pandemic-Era Tax Break Is Unraveling, and the Lawsuits Are Flying

Opening Call:

Stock futures fell on Wednesday as central-bank officials' cautious comments regarding the speed of rate cuts continued to weigh.

European Central Bank President Christine Lagarde said this morning that interest-rate cuts were likely, but data dependent and that there was still some uncertainty.

This came after Fed governor Christopher Waller said Tuesday that continued declines in inflation would allow the Federal Reserve to lower rates, but there was "no reason to move as quickly or cut as rapidly as in the past."

Overseas Markets

Weak China data hit Asian markets, as Hang Seng fell more than 3%, while the mainland's CSI 300 index declined 2%. The data highlighted slowing economic growth, a property-market meltdown and population decline .

European stocks also slipped with the Stoxx 600 Index losing over 1%, while London's FTSE 100 fell further after data showed an unexpected rise in U.K. inflation .

Premarket Movers

U.S.-listed shares of Alibaba were down 3.2%, JD.com slumped 5.2%, and PDD Holdings fell 4.4% after gross domestic product in China expanded 5.2% in the fourth quarter and for 2023.

Impinj said it expects fourth-quarter revenue of more than $70 million, above its prior guidance of $65.5 million to $68.5 million. Shares rose 5.9%.

Interactive Brokers reported fourth-quarter adjusted earnings of $1.52 a share, missing analysts' estimates by 1 cent. The stock declined 3.6%.

NIO's stock fell almost 10% in Hong Kong after rival Tesla cut its prices in China. NIO's ADRs declined more than 6% premarket.

Progress Software posted fourth-quarter adjusted earnings that fell from a year earlier but topped Wall Street expectations. Shares were up 2.9%.

Spirit Airlines fell 47% on Tuesday and was down a further 4.4% in premarket trading after a federal judge blocked the budget carrier's acquisition by JetBlue Airways, saying the deal would do harm to the airline's cost-conscious fliers. JetBlue rose 1%.

Forex:

The euro fell to its lowest level against the doll ar so far in 2024 as bond markets reassessed interest-rate cut pricing, driving Treasury yields higher, Danske Bank Research said.

"EUR/USD faced renewed pressure as markets reassessed the aggressive pricing of rate cuts."

Danske Bank Research maintained its strategic case for a lower EUR/USD, and in the near term, prefering to sell on any rallies.

The euro repeatedly failed to sustain a break above $1.10 throughout 2023 and is shy of this level so far in 2024, but BNP Paribas Markets 360 believes it has the potential to rise in the longer term.

"Going forward, we think it's more likely than not that this barrier [1.10] is broken through and we forecast EUR/USD to close the year at 1.15."

Sterling rebounded after data showed U.K. annual CPI inflation unexpectedly rose to 4.0% , dulling chances of an early interest-rate cut.

The data prompted some to slash bets on the currency falling below $1.26 against the dollar, Swissquote Bank said.

The U.K.'s anemic growth should limit gains in sterling against the U.S. dollar, Swissquote added.

Energy:

Oil prices traded lower on a stronger dollar as investors scaled back expectations of imminent interest-rate cuts following comments from a Fed official.

"Oil markets continue to trade in a fairly rangebound manner despite developments in the Middle East," ING said.

"Comments from a Fed official and a surge in the USD yesterday held large parts of the commodity complex back."

Meanwhile, tensions in the Middle East were escalating amid fresh Houthi attacks on ships transiting the Red Sea and retaliation strikes from the U.S. and its allies.

Metals:

Metals prices were falling as the latest figures from top consumer China weighed on market sentiment, revealing the country's economy grew at one of its slowest rates in decades last year.

Meanwhile, the impact of shipping disruptions in the Red Sea seems to be having only a marginal impact on commodities, but further escalation of the conflict could be supportive for prices.

"While the conflict at the Red Sea is not directly translating into higher base metals prices, the indirect impacts are mounting, possibly delaying shipments and increasing freight costs," Sucden Financial said.

Copper

Copper prices are likely to trough around $8,000 a metric ton in 3Q , Macquarie said, who raised its expected copper-price nadir from a previous forecast of $7,600/ton.

"We have taken a more constructive view" following supply disruptions that suggest a smaller-than-anticipated surplus of the metal in 2024, it said.

TODAY'S TOP HEADLINES

Maersk, Hapag-Lloyd Form Shipping Alliance

Danish shipping giant A.P. Moeller-Maersk and Germany's Hapag-Lloyd are teaming up to form a new vessel-sharing agreement from next year, shaking up the global lineup of shipping alliances.

Following the end to the pandemic-fueled cargo boom, when freight demand outstripped the supply of ships, the industry has been left with a surplus of vessels and sharply lower freight rates, while the recent escalation of hostilities in the Middle East has forced shippers to divert their vessels by thousands of miles.

BP Veteran Named as CEO, Signaling Commitment to Renewable Shift

BP appointed Murray Auchincloss as chief executive, turning to a company veteran to continue the oil giant's shift toward renewable energy.

Auchincloss has run the London-based company on an interim basis since September following the abrupt resignation of Bernard Looney over his failure to disclose details about past relationships with colleagues.

Tesla cuts prices in Germany after reductions in China, report says

Tesla cut the prices of its Model Y in Germany, just a week after cutting prices in China, according to a report.

Reuters reported that Tesla TSLA has cut one Model Y vehicle by 9% and another by 8.1%.

Europe Braces for Trade Hit as Global Commerce Slows

Europe's trade relationships are set to suffer as global conflicts and protectionism open a chillier chapter in international commerce, hitting growth on the continent.

Trade is now growing at a slower pace than the world economy, marking a fundamental shift away from the trade-centric globalism prevalent since the end of the Cold War, Boston Consulting Group said in a report published this month. The slowdown is due to rising protectionism, including in China, and increased disruptions from conflict, BCG said.

How Quickly Donald Trump Could Clinch the Republican Nomination

Florida Gov. Ron DeSantis muscled out a second-place finish in Iowa, but he trailed Donald Trump by roughly 30 points. Polls have shown Nikki Haley on the rise in New Hampshire, in some cases closing the gap with Trump to single digits. But beyond that, there is little to suggest anyone is positioned to damp the air of inevitability around Trump's campaign. If Trump continues winning by margins similar to his dominant performance in Iowa, he is on a path to securing the delegates needed to clinch the nomination in a matter of weeks.

Here's a look at how the delegate math might add up through Super Tuesday.

Taiwan's New Leader Says He'll Stick to the Status Quo-but His Past Makes the U.S. Nervous

TAINAN, Taiwan-More than a decade ago, some residents of this southern Taiwanese city got a lesson in the character of the man who is now set to be Taiwan's next president.

Lai Ching-te, then Tainan's mayor, wanted to move a section of railway underground. Residents whose homes would have to be demolished blocked bulldozers with their bodies and accused him of selling them out to property developers. Political opponents called him a dictator.

China's Population Decline Accelerates as Women Resist Pressure to Have Babies

Births in China dropped by more than 500,000 last year to just over 9 million in total, accelerating the decline in the country's population as women shrugged off the government's exhortations to reproduce.

The number of newborns has gone into free fall over the past several years. Official figures released Wednesday showed that China had fewer than half the number of births in 2023 than the country did in 2016, after China abolished the one-child policy. The latest number points to a fertility rate-the number of children a woman has over her lifetime-that is close to 1.0, a level considered by demographers as "ultralow."

Write to ina.kreutz@wsj.com

TODAY IN CANADA

Earnings:

Haivision Syss 4Q

Economic Calendar (ET):

0830 Nov International transactions in securities

0830 Dec Industrial product and raw materials price indexes

Stocks to Watch:

Gildan Activewear Provides Update on Former CEO; Gildan Activewear Alleges Glenn Chamandy Failed to Disclose Investments in Funds Managed by Shareholder Who Has Now Come Out in Support of Reinstalling Chamandy as CEO

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Mandalay Resources Achieves 2023 Production Guidance,/ Provides Outlook for 2024; Consolidated Annual Production Guidance of 90,000 to 100,000 Gold Equivalent Ounces

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Parex Resources Announces Approval of Normal Course Issuer Bid and Automatic Shr Purchase Plan; to Buy Up to 10.2M Shares

Expected Major Events for Wednesday

07:00/UK: Dec CPI

07:00/UK: Dec UK producer prices

09:30/UK: Oct Card Spending statistics

09:30/UK: Nov UK House Price Index

12:00/US: 01/12 MBA Weekly Mortgage Applications Survey

13:30/US: Dec Import & Export Price Indexes

13:30/CAN: Nov International transactions in securities

13:30/US: Dec Advance Monthly Sales for Retail & Food Services

13:30/CAN: Dec Industrial product and raw materials price indexes

13:55/US: 01/13 Johnson Redbook Retail Sales Index

14:15/US: Dec Industrial Production & Capacity Utilization

15:00/US: Nov Manufacturing & Trade: Inventories & Sales

15:00/US: Jan NAHB Housing Market Index

19:00/US: U.S. Federal Reserve Beige Book

21:30/US: 01/12 API Weekly Statistical Bulletin

23:50/JPN: Nov Orders Received for Machinery

All times in GMT. Powered by Kantar Media and Dow Jones.

Expected Earnings for Wednesday

Alcoa Corp (AA) is expected to report $-1.04 for 4Q.

Avalon Advanced Materials Inc (AVL.T) is expected to report for 1Q.

BancFirst Corp (BANF) is expected to report $1.44 for 4Q.

Bar Harbor Bankshares (BHB) is expected to report $0.67 for 4Q.

CNB Financial Corp (Pennsylvania) (CCNE) is expected to report $0.54 for 4Q.

Caldwell Partners International Inc (CWL.T) is expected to report for 1Q.

Cass Information Systems (CASS) is expected to report $0.48 for 4Q.

Charles Schwab Corp (SCHW) is expected to report $0.50 for 4Q.

Citizens Financial Group (CFG) is expected to report $0.60 for 4Q.

Community Trust Bancorp (CTBI) is expected to report $1.08 for 4Q.

Discover Financial Services (DFS) is expected to report $2.51 for 4Q.

FRMO Corp (FRMO) is expected to report for 2Q.

First Community Corp. (South Carolina) (FCCO) is expected to report $0.37 for 4Q.

First Financial Bankshares Inc (FFIN) is expected to report $0.34 for 4Q.

Fortrea Holdings Inc (FTRE) is expected to report for 4Q.

HB Fuller Co (FUL) is expected to report $1.07 for 4Q.

Hingham Institution for Savings (HIFS) is expected to report for 4Q.

John Marshall Bancorp Inc (JMSB) is expected to report for 4Q.

Kinder Morgan Inc (KMI) is expected to report $0.31 for 4Q.

Madison Pacific Properties Inc - B Share (MPC.T) is expected to report for 1Q.

Ocean Biomedical Inc (OCEA) is expected to report for 3Q.

Parke Bancorp Inc (PKBK) is expected to report for 4Q.

Plumas Bancorp (PLBC) is expected to report $1.23 for 4Q.

Prologis Inc (PLD) is expected to report $0.60 for 4Q.

SeaChange International Inc (SEAC) is expected to report for 3Q.

Synovus Financial (SNV) is expected to report $0.40 for 4Q.

U.S. Bancorp (USB) is expected to report $0.71 for 4Q.

Wayne Savings Bancshares Inc (WAYN) is expected to report for 4Q.

Wintrust Financial Corp (WTFC) is expected to report $2.42 for 4Q.

Powered by Kantar Media and Dow Jones.

ANALYST RATINGS ACTIONS

Acadia Realty Trust Cut to Hold From Buy by Truist Securities

Ambrx Biopharma Cut to Neutral From Outperform by Baird

Americold Realty Trust Raised to Buy From Hold by Truist Securities

APA Cut to Sector Perform From Sector Outperform by Scotiabank

AvalonBay Cut to Hold From Buy by Truist Securities

Axonics Cut to Hold From Buy by Truist Securities

Bank of America Cut to Hold From Buy by Odeon Capital

BlackRock Raised to Outperform From Market Perform by TD Cowen

Boeing Cut to Equal-Weight From Overweight by Wells Fargo

Boot Barn Holdings Cut to Hold From Buy by Williams Trading

Boston Beer Raised to Market Perform From Underperform by Bernstein

Brinker International Cut to Underweight From Equal-Weight by Morgan Stanley

Brinker International Raised to Buy From Hold by Gordon Haskett

Cactus Cut to Hold From Buy by Benchmark

Carrols Restaurant Cut to Equal-Weight From Overweight by Stephens & Co.

Celanese Cut to Underperform From Neutral by B of A Securities

Centerspace Raised to Outperform From Sector Perform by RBC Capital

Chevron Cut to Sector Perform From Sector Outperform by Scotiabank

CMS Energy Raised to Outperform From Peer Perform by Wolfe Research

Coherent Raised to Overweight From Equal-Weight by Barclays

CVR Energy Cut to Sector Underperform From Sector Perform by Scotiabank

DocuSign Raised to Equal-Weight From Underweight by Morgan Stanley

Dollar General Raised to Overweight From Equal-Weight by Morgan Stanley

Domino's Pizza Raised to Buy From Hold by Gordon Haskett

Dow Raised to Buy From Neutral by B of A Securities

Driven Brands Holdings Cut to Equal-Weight From Overweight by Morgan Stanley

DTE Energy Cut to Peer Perform From Outperform by Wolfe Research

DuPont de Nemours Cut to Underperform From Buy by B of A Securities

Dutch Bros Raised to Buy From Hold by Stifel

Ecolab Raised to Neutral From Underperform by B of A Securities

Equinix Raised to Buy From Hold by Truist Securities

Equity Lifestyle Cut to Hold From Buy by Truist Securities

Federal Realty Raised to Buy From Hold by Truist Securities

Five Below Cut to Hold From Buy by Craig-Hallum

Floor & Decor Holdings Cut to Market Perform From Outperform by Bernstein

Fluence Energy Raised to Outperform From Market Perform by BMO Capital

FMC Corporation Cut to Underperform From Neutral by B of A Securities

G-III Apparel Cut to Underweight From Equal-Weight by Wells Fargo

Harpoon Therapeutics Cut to Market Perform From Outperform by TD Cowen

Helmerich & Payne Cut to Hold From Buy by Benchmark

Hercules Capital Cut to Neutral From Buy by Compass Point

Hewlett Packard Ent Cut to Market Perform From Outperform by Bernstein

Home Depot Raised to Overweight From Neutral by Piper Sandler

Hyatt Hotels Cut to Neutral From Buy by Redburn Atlantic

Levi Strauss Cut to Equal-Weight From Overweight by Wells Fargo

MasTec Cut to Neutral From Outperform by Baird

Mid-America Apartment Raised to Buy From Hold by Truist Securities

Mid-America Apartment Raised to Sector Perform From Sector Underperform by Scotiabank

Nabors Cut to Hold From Buy by Benchmark

NetApp Cut to Market Perform From Outperform by Raymond James

Northrop Grumman Cut to Neutral From Outperform by Baird

NOV Cut to Hold From Buy by Benchmark

OGE Energy Cut to Neutral From Buy by Ladenburg Thalmann

Omega Healthcare Cut to Neutral From Buy by B of A Securities

Parsons Raised to Outperform From Neutral by Baird

Patterson-UTI Cut to Hold From Buy by Benchmark

PayPal Holdings Cut to Neutral From Buy by Mizuho

ProPetro Holding Cut to Hold From Buy by Benchmark

Raytheon Technologies Cut to Neutral From Outperform by Baird

Rent the Runway Cut to Equal-Weight From Overweight by Wells Fargo

Revvity Cut to Neutral From Buy by UBS

Rocket Cos. Cut to Sell From Neutral by Citigroup

Sallie Mae Raised to Buy From Neutral by Citigroup

Sana Biotechnology Raised to Buy From Neutral by HC Wainwright & Co.

SL Green Realty Cut to Hold From Buy by Truist Securities

Starbucks Cut to Hold From Buy by Gordon Haskett

Starbucks Raised to Overweight From Equal-Weight by Morgan Stanley

Sun Communities Cut to Hold From Buy by Truist Securities

Sweetgreen Cut to Underweight From Equal-Weight by Morgan Stanley

Tractor Supply Cut to Underweight From Equal-Weight by Morgan Stanley

Transphorm Cut to Hold From Buy by Benchmark

Triumph Group Raised to Outperform From Neutral by Baird

Valvoline Raised to Overweight From Equal-Weight by Morgan Stanley

Ventas Raised to Buy From Neutral by B of A Securities

Wabtec Raised to Buy From Neutral by B of A Securities

Wayfair Raised to Overweight From Equal-Weight by Morgan Stanley

Wendy's Cut to Hold From Buy by Gordon Haskett

Western Digital Raised to Buy From Hold by Deutsche Bank

Western Digital Raised to Overweight From Equal-Weight by Barclays

Whitestone REIT Raised to Buy From Hold by Truist Securities

This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

January 17, 2024 06:29 ET (11:29 GMT)

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